EU needs better spending to regain citizens' trust

(BRUSSELS) - The new president of the EU's Court of Auditors has called on the EU to improve its accounts by delivering better value for money and more transparency, and ensure its financial rules are correctly applied.

The EU faced a major challenge to regain trust, ECA President Klaus-Heiner Lehne told the European Parliament's Budgetary Control Committee Thursday."People cannot even begin to trust the EU institutions if they do not believe we are looking after their money properly and keeping a good account of how we are doing that," he said.

This year, the ECA annual report shows that grant schemes based on reimbursing beneficiaries' costs tend to have higher levels of error than entitlement schemes. It also draws attention to the risks to financial management associated with providing financial support through loans, guarantees and equity investments either directly or indirectly from the EU budget.

The auditors have signed off the European Union's 2015 accounts, as they have done for every year since 2007. They also conclude that the collection of EU revenue was free from error.

However, they estimate the level of error for expenditure at 3.8% (compared with 4.4% in 2014). The ECA stresses that this is not a measure of fraud, inefficiency or waste; rather it is an estimate of the money that should not have been paid out because it was not used fully in accordance with EU rules.

The auditors continue to find nearly the same estimated level of error under shared management with the Member States (4.0 %) as for expenditure managed directly by the Commission (3.9 %).

The report emphasises that a major influence on the level of spending errors is the difference between reimbursement schemes, where the EU refunds eligible costs on the basis of declarations made by beneficiaries, and entitlement schemes, where payments are made for meeting conditions. Reimbursement of costs is linked to a much higher level of error (5.2 %) than spending on an entitlement basis (1.9 %).